PT Bukit Asam Tbk (IDX: PTBA) signed a contract to sell 2 million tons of high-calorie coal or Rp2 trillion or US$142.85 million for 2020 to Taiwan' petrochemical company, Formosa Plastics Group - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesia coal mining company, PT Bukit Asam Tbk (IDX: PTBA) signed a coal sales contract 2 million tons (MT) of coal with worth Rp2 trillion (US$142.85 million) with Taiwan’ petrochemical company, Formosa Plastics Group (FPG), said the CEO on Nov. 21. The stepped part of the company’ effort to open a new export markets

With this sale contract, the miner hope to support next year’ sales target from 2019′ target 28.38 MT of coal. Last year, the state-owned firm succeed sold 23.6 MT of coal. Arviyan Arifin, the CEO said, beside Taiwan, the producer also opened to other new markets.

Aside signed the deal with FPG, Bukit Asam also held a meeting with the Taiwan Power Company (TPC) and met with the deputy minister for economic affairs of Taiwan, Wen-Sheng Tseng. During the meeting the two sides discussed about the potential coal supply to Taiwan, the development of coal downstream projects and renewable energy.

“Its also aimed to increase our coal sales and to support the performance of the Mining Industry Holding (MIND ID),” he explained through a written statement on Monday (11/25).

He revealed, before go to Taiwan’ market, Bukit Asam ha has sold coal to Thailand, Laos and Vietnam. Currently, the miner looking other market such as Sri Lanka to anticipate the low selling prices of coal in traditional countries such as Japan, China and India, he adds.

According to the company’ director Adib Ubaidillah, coal selling price was quite depressed because the country was restricting imported coal. Under these conditions, he adds, unit of MIND ID must find an alternative market to for their coal sales.

In 2019, Bukit Asam targeting the export sales could reach 14.1 MT of coal increased from a year ago amounted to 10.7 MT of coal. To support the target, the company will carry out several projects.

For the expansion plan, said Arifin, they budgeted Rp6.5 trillion in 2019. This value is the same as the realization of investment spent in 2018 with total amount $464.28 million.

He revealed, as much as Rp5.34 trillion from the investment fund will be used to carry out several development projects including increasing coal transportation capacity. Bukit Asam and state-owned train operator, PT Kereta Api Indonesia (KAI), has signed an agreement to develop facility to increase the capacity of coal to 60 MT of coal per annum by 2023.

The miner will also reactivate the Tanjung Enim – Kertapati and Tanjung Enim – Tarahan train lines through cooperation with KAI in this year. Through this reactivation, Arviyan hoped that coal transportation capacity in 2019 can reach 20.3 MT of coal and 25 MT of coal in 2020.

Then, the company will also develop dock and port facilities. He said that in 2023 port capacity could be better. For downstream business, Bukit Asam will complete the feasibility study for the construction of the downstream integration plant in Tanjung Enim.

In the next 2022, the CEO expect the factory which be made together with other state-owned firm, PT Pertamina, PT Pupuk Indonesia and private company, PT Chandra Asri Petrochemical Tbk (IDX: CAPC) will be operational.

Regarding the coal gasification plant, he added, the company is still completing the discussion process with PT Pertamina. He stated, “At present we continue to hold meetings to discuss design issues and the portion of investment development.”

Furthermore, Bukit Asam also plans to form a joint venture with PT Antam Tbk (IDX: ANTM) with an investment of $350 million which is targeted to be operational by mid of 2023. The joint venture was formed to build two steam power plants and diesel power plants in East Halmahera Regency, North Maluku.

Arifin said that the steam power plants to be built will have a capacity of 3×60 megawatts (MW) and diesel power plants with a capacity of 3×17 MW.

The plant is intended to provide energy supply for Antam’s ferronickel plant in East Halmahera. The steam power plant is estimated to consume 650.000 tons of Bukit Asam’s coal per year.

Written by Staff Editor, Email: theinsiderstories@gmail.com